Suffolk County Council had proposed to save £700,000 a year by charging more to students who used transport to go to faith schools, post-16 transport and some special needs provision.

It has been consulting with parents across the county – but the government has now stepped in to offer education authorities like that in Suffolk extra funding.

The government is set to pay Suffolk an extra £753,000 during the current financial year and a further £935,000 next year.

There is no specific requirement to spend this on home to school transport, but Suffolk is set to take that decision at its cabinet meeting on May 24.

That will see an increase in costs for those using school transport – but a much smaller rise than had been proposed.

Now, instead of removing entirely the subsidy the council provides for transport for Roman Catholic students and increasing the cost for post 16 students to £200 per term, there will be a £20 increase in the price of bus passes to £150 per term.

There will be no changes in the eligibility criteria for passes for 2011/12 – so no student already studying, or with a place offered to start in September 2011, on a school, sixth form or college course should need give up their studies or move to another school due to the cost of transport.

This move should please parents of students at Catholic schools across the county like St Albans in Ipswich and St Louis in Bury St Edmunds.

It will also be a relief to parents with youngsters at Suffolk One sixth form centre – the cost of termly transport passes had been set to increase dramatically.

Cabinet member with responsibility for young people Graham Newman said the decision was “fantastic news.”

He said: “To be fair, it is the government that has allowed this to happen, but it really has got us out of a difficult position.

“There were families who were facing the prospect of withdrawing their children from Catholic schools because they could not afford the fares and there were no spaces in their local high schools.

“That was a real headache for us and I am delighted that the government has made this extra money available.”

But Mr Newman warned it was inevitable that prices for concessionary passes would have to rise over the next few years.

He said: “As sure as fuel prices rise, the charge for concessionary passes will go up and there is not guarantee that this government money will be available into the future.

“We do need to consider what will be happening in years ahead, but it is fantastic that there will be no disruption to young people this year.”

Labour group leader Sandy Martin felt the decision’s timing was linked to this week’s elections.

He said: “Clearly this will come as a relief to parents and students, but I have to say it is an extraordinary way to run a country – or a county.

“To announce a whole raft of cuts and then do a u-turn in the run-up to elections smacks of a cynical attempt to bribe the voters.”